MARKETS EXPECT UK INTEREST RATES TO BOTTOM OUT AT 3.0% IN Q1 2027, BOE SURVEY SHOWS

LONDON, Feb 6 (Reuters) - Investors polled by the Bank of England expect the central bank to steadily cut its main Bank Rate to a low of 3.0% by its March 2027 meeting, down from 3.75% after Thursday's interest rate decision, a survey showed on Friday.

Policymakers on the Monetary Policy Committee voted 5-4 to keep borrowing costs at 3.75% but signalled further cuts ahead if an expected fall in inflation looks like it will last.

Financial markets are almost fully pricing in two more quarter-point rate cuts in 2026 following that decision, according to LSEG data, but do not see rates falling to 3%.

The BoE conducted its quarterly Market Participants Survey from January 21-23 and received responses from 92 people.

The survey showed expectations for BoE quantitative tightening in the 12 months from October were unchanged at a median 50 billion pounds ($68 billion), the same as when the survey was last published by the central bank in November.

The Market Participants Survey also showed the median expectation for 10-year gilt yields was for them to finish 2026 at 4.25%, compared with 4.0% in the last survey.

($1 = 0.7361 pounds)

(Reporting by Suban Abdulla; editing by David Milliken)

2026-02-06T12:45:42Z